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UK aims to give pension trustees new powers to scrutinise takeover bids

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  • UK aims to give pension trustees new powers to scrutinise takeover bids

UK - Pension trustees will be allowed to offer feedback on potential takeovers of sponsoring companies under new rules being considered by the UK regulator.

The country's Takeover Panel yesterday released a consultation paper outlining proposed changes that would, according to law firm Eversheds, grant trustees the same rights as employee representatives under the European Takeovers Directive.

Stephen Nash, partner and head of the takeover team at the firm, said the proposals would appear to be the "logical extension" of the EU Directive.

The changes would require any bidding company to disclose its intention regarding the future of the pension fund prior to the merger or acquisition being agreed, as well as allowing trustees to see their feedback included in the offeror documentation.

"These proposals would appear a logical extension of the rules concerning employee representatives, but will probably have little practical impact," Nash said.

"Even without these proposed changes, where an offeree's pension scheme deficit is of significance to an offeror, it still needs to reach agreement with the pension scheme trustees as to future funding commitments before announcing its takeover offer."

Nonetheless, the National Association of Pension Funds director of policy Darren Philp welcomed the changes.

"If implemented, this would enable trustees to get much more information about the bidder's intentions for the pension scheme," he said.

"This is important, as it gives trustees the information they need, empowering them to ask the right questions and effectively represent the interests of those in the company scheme, both savers and pensioners."

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